Published By : 28 Sep 2015 | Published By : QYRESEARCH
Oil prices declined in Asian albeit a fall in the U.S. drilling activity. Leading experts and research analysts pointed out to weak economic growth outlook as one of the main reason for low crude oil prices.
Asia is not about to spring back as the growth problem endures, said co-head at HSBC in a note to clients on Monday. The note also discussed China’s industrial profits drop of 8.8% from the same month last year and industry profits declination by 1.9% in August.
IMF is expected to alter its predictions for the global economic growth because of the slower growth in emerging economies. Brent crude futures LCOc1 were rated at $48.18 per barrel and declined with 42 cents. Moreover, WTI futures CLc1 floated at 39 cents lower (around $45.31 per barrel).
Crude futures are down more than 10% since the end of August. The price falls declined despite the ongoing reduction in the U.S. drilling activity. The U.S. energy companies cut the oil rigs in a row last week that marked the sign of continued weak prices that were causing oil and gas producers to reduce drilling plans. However, yet analysts said the U.S. oil output was holding up despite the low activities in the drilling field.
In contrast, the rapid increase of the observed backlog of wells could lead to higher production by end of this year and beginning of 2016. The U.S. output data would be the key driver for this week for oil prices and particularly for Chinese trading that is seven-day slow ahead of the National Day holiday.
The U.S. EIA is due to release its monthly fuel supply report on Wednesday. The focus is mainly on the US production figures with signs that could boost both Brent and WTI flat prices. The oversupply in oil markets had reduced since the second quarter to nearly 1 million barrels per day.